Proposed regulations on coverage of preventive services under the health care reform law are often ambiguous or unclear with respect to their application to employer-provided health plans, warned the ERISA Industry Committee (ERIC), a Washington, D.C.-based trade association representing large U.S. employers.
On Sept. 7, 2010, ERIC submitted comments on the interim final regulations for group health plans and health insurers relating to coverage of preventive services under the Patient Protection and Affordable Care Act. The Departments of Health and Human Services (HHS), Labor, and Treasury published the interim final regulation in the Federal Register on July 19, 2010 (see the SHRM Online article "Administration Issues Regulations on First-Dollar Preventive Care").
ERIC's letter expresses support for provisions in the interim final regulations that permit employers to apply reasonable medical management techniques to preventive care, but also warns that the regulations impose mandates that are based on recommendations for an audience of health care providers and, as such, are often ambiguous or unclear with respect to their application to health plans.
The letter, signed by ERIC President Mark Ugoretz, states that:
Depending on the scope of these mandates, plans could be forced to expand their coverage for preventive services beyond the level required by the statute, adding significant new cost burdens at a time when increasing costs are already driving many employers to question the extent of the coverage they offer.
In a separate statement, Ugoretz adds that the "preventive care regulations should not be a stealth tactic to mandate medical procedures and benefits."
ERIC's letter offers several recommendations to resolve some of this ambiguity to help employers understand the parameters of the regulation and comply with the new preventive care mandate, including:
• Clarifying and illustrating the scope of a plan's discretion to use reasonable medical management techniques.
• Making clear that plans are not required to cover the treatment of conditions identified through recommended preventive care.
• Confirming that plans are not required to cover taxable benefits (such as over-the-counter drugs).
• Confirming that a plan will not become subject to the parity requirements of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) merely because it provides a mental health or substance use disorder benefit in compliance with the regulations' recommended preventive services.
• Explaining technical terms related to counseling and interventions in a way that will clarify for plan sponsors and administrators the scope of the recommendations and the preventive services that must be offered.
'Reasonable' Medical Management Techniques
Although the interim final regulations identify the recommended preventive services that plans must cover, they give plans the authority to identify the specific items and services they must cover and to limit the scope of their coverage using reasonable medical management techniques. According to ERIC's letter:
We agree strongly that such decisions should be left to plan administrators and plan sponsors. We note, however, that employers face an excise tax of up to $100 per day per individual for each failure to comply with section 2713 [of the Public Health Service Act].
In addition, plan administrators potentially must conduct a burdensome and exacting appeals process to resolve any dispute with participants concerning the preventive services the plan must cover without cost-sharing. Therefore, it is critically important that the Departments clarify and illustrate the extent of a plan's discretion to define the scope of coverage for recommended preventive services.
ERIC recommends that the issuing departments (HHS, Labor and Treasury) add examples to the interim final regulations that will illustrate points addressing frequency of service, recommended range of frequencies, settings for coverage of services, and the method and scope of coverage.
The letter urges the departments to make clear that a plan may limit its coverage to the preventive services that are appropriate for the general population defined by the recommendations and guidelines, and that the plan is not required to cover more frequent screenings or other additional services for specific individuals within that population who might be at higher risk for a particular condition.
ERIC also urges that the departments create an advisory task force that will give group health plans a voice in delineating the recommended preventive care mandates. The letter contends that the groups that develop recommendations and guidelines for preventive care consist mainly of health care providers and other professionals, who have a stake in specific procedures, and do not include representatives of the employer-group health plans that must cover, administer, and pay for these services.
"It would be extremely helpful if representatives of group health plans could have a voice in the process that will identify new items and services that must be covered as 'recommended preventive services,' and that will determine when items and services should be removed from the mandated coverage list," Ugoretz contends.
"Those who sponsor and pay for the benefits offered by health plans have as great a stake in determining the benefits that are offered as those who have a stake in providing the procedures," he added. "Health care costs continue to escalate at an alarming rate and plan sponsors already have reached the limit of the additional costs they can absorb. The burden of increasing costs, increases that we strongly believe need to stop, will increasingly fall on consumers," the letter concludes.
Administration Issues Regulations on First-Dollar Preventive Care, SHRM Online Benefits Discipline, July 2010
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